Inventory theory (EOQ models)
Economic Order Quantity models minimize inventory costs (ordering and holding costs) by determining the optimal order quantity.
Management Cost Models
Models that help organizations supervise and direct their activities so resources are used efficiently and effectively to reach strategic objectives.
Overview
Management control models are tools or methodologies that align daily operations with strategic objectives, providing key metrics and indicators for decision-making. Below are the cost models we apply most often.
Model 1
Variable cost minimization model
Minimizing variable costs is a common problem in areas such as process optimization, logistics and production. These are some of the most used models:
Operational audit
An audit of purchases that compares each shipment with its purchase order. Quantities, product quality and prices are reviewed, so the comparison raises a red flag immediately and the value of the invoices can be corrected.
Standardization by product or service
Each activity in a production or service process is detailed to determine the minimum use of resources that guarantees efficiency and lowers variable cost.
Model 2
Fixed asset cost minimization model
Fixed asset cost minimization models are financial and optimization tools that reduce the costs of acquiring, maintaining and operating a company's assets without compromising efficiency or operational capacity. They focus on managing the life cycle of fixed assets: property, plant, machinery, equipment and other tangible investments.